Iowa lawmakers grapple with budget cuts

DES MOINES - Legislative Republicans finished their first week in charge of the Statehouse on Thursday still working to hammer out an agreement with Gov. Terry Branstad on how best to manage a projected shortfall in the state budget.

Leaders in the House and Senate said they were optimistic they could close the gap quickly, but a new issue surfaced Thursday over fully 'coupling” state and federal income tax issues for the 2016 tax filing year as farmers, businesses and individuals prepare their taxes. That coupling carries a price tag of $100 million and further complicates negotiations.

Earlier this week, Branstad laid out his proposal for cutting $110 million in state spending, excluding K-12 education, Medicaid and local property tax credits from those cuts.

Senate Majority Leader Bill Dix, R-Shell Rock, noted his members did not vote for last session's spending bills that led to the current shortfalls that developed when revenue growth projections failed to meet expectations.

'We've been warning as a caucus that the level of spending was accumulating to a point where this kind of crisis was going to occur, and we're prepared to fix it,” he said. 'The longer we wait, the more difficult it gets to make those reductions in the time frame necessary.”

Rep. Pat Grassley, chairman of the House Appropriations Committee, said legislative negotiators were working to erase $117 million in overspending by going line by line through the governor's proposal and incorporating what they could under an expedited time frame.

'We're trying to fill a pretty big hole, and you can only take so many things off the table that are such big items if you are going to be making these adjustments,” he said.

Iowans may have gotten a partisan taste of things to come when a brief debate broke out on the Senate floor over the governor's plans to cut higher education, corrections, the courts, public safety and other spending areas to bring this year's budget in balance.

Sen. Herman Quirmbach, D-Ames, called the governor's proposed cuts 'anti-worker, anti-youth and anti-education,” while Sen. Bill Dotzler, D-Waterloo, worried efforts to address skilled worker shortages would be exacerbated in the de-appropriation process. In a committee meeting later, Quirmbach said 'higher education is taking it in the teeth” under Branstad's approach.

Sen. Julian Garrett, R-Indianola, called on minority Democrats to offer constructive alternatives, noting 'they were the ones who were in charge over the last several years when we passed these budgets that were overspending. Remember we at one time had a $900 million surplus? How much of that is left? None, it's all gone.”

Senate Minority Leader Rob Hogg, D-Cedar Rapids, said Democrats oppose many of the proposed cuts, especially more that $34 million for higher education that are like 'eating our seed corn” rather than investing in young people.

'I think we'll be looking at lots and lots of court closures or layoffs, and it's totally unnecessary,” Hogg said. 'The state of Iowa is not in a fiscal crisis. We are in a position where we can come up with an alternative plan and deal with this short-term problem in a way that doesn't do so much damage to the court system. It's not about the cuts. It's about the loss of services and safety and investment in Iowans that's the problem.”